FY18 Budget Season Offers Different Visions for America

June 12, 2017

It’s budget season in Congress. Below is a breakdown of the different budget proposals introduced so far and those still in the works.

House and Senate GOP budgets: While President Trump released his administration’s FY18 budget proposal nearly three weeks ago on May 23 (more on this below), House and Senate leaders have not yet followed suit. That may change soon, as the House GOP budget could be released and taken up in the House Budget Committee as soon as the week of June 19 with possible floor action as soon as the following week. This timing isn’t certain, however, and action on the House budget could also be pushed back until July or even September after the August recess.

Advocates are concerned that the House GOP budget will contain massive cuts that would be devastating to human needs programs. While many members of the GOP have attacked parts of President Trump’s budget, there are many cuts in Trump’s budget that may also be included in the House GOP version; in fact, advocates have pointed out that past House GOP budgets have, in some cases, been more harmful to low-income programs than President Trump’s.

Unlike Trump’s budget, which called for $54 billion in cuts to non-defense discretionary (annually appropriated) programs in FY18 to pay for increased Pentagon spending, the House budget is expected to keep funding levels for this category in line with current law. However, because sequestration-level funding is scheduled to go back into effect for FY18 unless a bipartisan budget deal is reached to lift the spending caps, this would still require a $5 billion cut below this year’s appropriations totals ($3 billion cut from non-defense programs; $2 billion from the Pentagon). Any additional cuts in the House budget would be on top of this already-reduced funding level.

For example, the House GOP budget is expected to include special instructions known as reconciliation instructions that would direct subcommittees to find savings, which are expected to come in the form of cuts to safety net programs such as Medicaid and possibly SNAP/food stamps and the Temporary Assistance for Needy Families program. Using the reconciliation process allows Republicans to pass a measure with tax cuts (which are also expected in the House budget) and cuts to entitlement programs with only a simple majority in the Senate.

Advocates are also concerned that House leadership may use language calling for a budget that is “deficit neutral” (rather than “revenue neutral”); doing so would allow them to offset, or “pay for” tax cuts with cuts to entitlement programs that help low- and moderate income people, without adding to the deficit.

Senate GOP leaders are not expected to act on their budget proposal until September. While advocates predict the Senate proposal may contain slightly smaller cuts than the House version, they still anticipate deep cuts and reconciliation instructions to allow tax cuts to pass with only a simple majority The House and Senate could work out a compromise budget and pass a joint budget resolution. A budget resolution does not go to the President for his signature and does not become law. Failure to pass a FY18 budget does not stop Congress from working on and passing FY18 appropriations bills. But it is necessary for the House and Senate to agree on a budget resolution in order to proceed with the fast-tracked reconciliation bills.

President Trump’s budget: Advocates quickly denounced President Trump’s budget, saying it would inflict irreparable harm on low- and moderate-income families. Recent analysis from the Center on Budget and Policy Priorities found that roughly three-fifths of the $4.3 trillion of non-defense cuts in President Trump’s proposed FY18 budget come from programs assisting low- and moderate-income people. These programs account for just 29 percent of non-defense spending and 24 percent of total program spending, but President Trump’s budget would get 59 percent of its cuts from them. In total, the Trump Administration’s budget would cut these programs by $2.5 trillion over 10 years. This includes a $1.6 trillion cut over 10 years to Medicaid, a $193 billion cut (more than 25 percent) to SNAP/food stamps, and a $72 billion cut to programs for people with disabilities and seniors over 10 years. Trump’s budget would also slash discretionary (annually appropriated) programs by $400 billion, including eliminating housing vouchers for more than 250,000 families, gutting job training programs, terminating 1.8 million children from afterschool and summer programs, and eliminating the Low Income Home Energy Assistance Program, to name just a few of the deep cuts. Trump’s budget also includes huge tax cuts for millionaires and corporations; CBPP estimates that millionaires alone would receive tax cuts that could total more than $2 trillion over the next decade.

Members of the Administration defended Trump’s budget during House and Senate Committee hearings last week, where many members of Congress from both sides of the aisle expressed concern with different aspects of the budget. Sen. Susan Collins (R-ME) was quoted by CQ as saying to Housing and Urban Development Secretary Ben Carson in one such hearing, “While we need to pursue program reforms and find ways to reduce the share of HUD’s budget that is consumed by rental assistance, merely shifting the costs onto the low-income elderly and disabled households that comprise 57 percent of the participants in these programs cannot be the answer.”

Congressional Progressive Caucus budget:On Wednesday, June 7, the Congressional Progressive Caucus, chaired by Reps. Raul Grijalva (D-AZ) and Mark Pocan (D-WI), held an event to introduce their budget alternative. Titled “The People’s Budget,” it Invests $2 trillion in America’s infrastructure, expands our country’s commitment to efficient renewable energy and green jobs, protects and expands affordable health care for millions of Americans, creates and promotes a fair tax system that benefits working families, raises revenue from the wealthiest individuals and from corporations who can afford to pay more, expands the Earned Income Tax Credit and the Child Care credit, expands affordable housing for low-income Americans, and reduces military spending. The People’s Budget also invests $1 trillion in effective early learning opportunities and for a child care for all program, makes debt-free college a reality for all students, provides a commitment to reduce poverty by half in ten years, calls for comprehensive immigration reform, including a pathway to citizenship, and invests $12.8 billion to end family homelessness, among other things. Many advocacy organizations and advocates applauded The People’s Budget, saying it showed that it is possible to invest responsibly in our future and provide opportunity for all. For more information on The People’s Budget, see CHN’s statement, this blog post, and this piece from the Congressional Progressive Caucus.